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How are Uber, Lyft, DoorDash, and Others Impacting Last-Mile Delivery?

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Last-mile delivery is the final step in shipping an order to its ultimate destination (e.g., a customer’s residence). Since it’s the section of the delivery process that most closely involves the end user, prioritizing it is essential for maintaining customer satisfaction.

Unfortunately, it isn’t easy to get right. So much so that the phrase “last-mile problem” has become a sad staple in the industry, with X Delivery research noting that 56% of all abandoned baskets are left due to delivery concerns.

Customers’ standards are higher than ever — they don’t just want fast; they want fast and free. Meeting these ever-increasing demands is proving difficult for many. But companies like Uber, Lyft, and DoorDash impact last-mile delivery in previously unseen ways, like improving delivery speed, enhancing driver flexibility, and providing advanced tracking.

Naturally, these businesses face their fair share of challenges, but the seven areas of the sector they’re influencing are proving transformational for employees and customers alike.

7 Ways Delivery Platforms are Reshaping Last-Mile Delivery

#1 Speed and Efficiency

The demand for faster, more efficient deliveries has been rising for years. However, the advent of DoorDash and similar platforms has accelerated, with customers consistently expecting same-day/instant delivery. 

From electronics to groceries to makeup to clothes, these providers leverage their extensive driver network to meet consumer demands effortlessly. With a mere click of a button, Americans can receive their order in as little as one hour, thanks to the platforms’ efficient process management. 

Of course, the various retailers’ inventory and warehousing management protocols can slow some delivery times. However, most big-name brands that’ve partnered with such platforms have managed to simplify proceedings accordingly.

#2 Cost Optimization

Traditionally, shippers employ drivers to pick up parcels and travel their pre-defined routes to satisfy last-mile delivery requirements. But Uber, Lyft, and other gig platforms flip that on its head, providing a cost-effective solution for small- and medium-sized businesses. 

All drivers are self-employed, meaning the company isn’t under any obligation to pay for vehicle maintenance, select routes, or pay wages when there isn’t work. Instead, drivers select the orders they can fulfill on the app, pick the packages up, and deliver the goods to the right customer. They receive payment for the work they’ve completed, keeping costs as low as possible. 

By saving last-mile delivery dollars, companies can charge less for shipping, satisfying customers who want delivery speed and cheapness when shopping online.

#3 Flexibility

Flexibility is perhaps gig economy platforms’ most prominent impact on last-mile delivery. They offer the ability to scale the workforce according to ever-changing demand — when there’s more work, more drivers can step in on demand; when there’s less work, fewer drivers take the reins. The same goes for sudden order spikes.

Drivers also have the freedom to take on as little or as much work as they want to, helping them achieve optimal work-life balances, regardless of their situation. 

#4 Technology Integration

The uptick in providers like Uber, DoorDash, and Lyft has rendered traditional track-and-trace technologies useless, leaving real-time visibility and on-demand communication in its place. The statistics speak for themselves:

 

    • 90% of customers prefer brands that offer tracking options.

    • 94% of customers are likelier to repeat purchases from brands exceeding delivery expectations.

    • At least 83% of customers track online orders.

These platforms integrate advanced technologies into their apps, enhancing overall customer experience during last-mile delivery by giving them an easy-to-access, on-the-go way to check and track their order status in real-time.

#5 Market Expansion

Uber, Lyft, and DoorDash boast particularly massive market presences, letting them fulfill last-mile delivery expansion needs quickly and efficiently — a feat traditional logistics networks do not have the facilities for.

Historically, stringent onboarding and weeks-long communication must occur before shippers can fill any gaps in their delivery processes. But today’s fast-paced world doesn’t have time to sit stagnant for this long, and gig economy platforms are proving that, especially Uber. The company’s drivers can be cross-dispatched, allowing their gig-based workforce to complete various activities on the same day.

#6 Competition and Innovation

It’s no secret that these platforms have shaken up the last-mile industry. And while those bogged down in traditional processes may disagree, these modern solutions have provided some much-needed competition, fueling innovation in the space. As a result, service quality, delivery models, and efficiency rates are improving unprecedentedly. 

Faster delivery offers a chance to build consumer loyalty. This rate of innovation could be the answer to increasing the percentage of firms offering two-hour delivery (currently sat at 19%) to do just that.

#7 Service Diversification

These platforms had relatively humble beginnings, offering ridesharing only. However, they have evolved into more than that, branching into delivery services and providing diverse last-mile solutions for businesses and consumers, like one-hour delivery, two-hour delivery, and pick, pack, and deliver.

Challenges Faced by Uber, Lyft, and Similar Providers

While Uber, Lyft, and similar platforms are undeniably revolutionary, they face a few challenges that could impact their abilities to have a prolonged impact on last-mile delivery:

 

    • Regulatory concerns — Regulatory speaking, the gig economy operates in pretty murky waters. It has raised many concerns among advocacy groups and policymakers regarding worker classification, labor rights, and benefits. Therefore, businesses using gig workers for last-mile deliveries may face scrutiny and legal challenges as time goes on.

    • Sustainability woes — Sustainability goals are hard to manage using a gig fulfillment process. Drivers may deliver packages separately, taking many trips to meet strict deadlines. While this ensures customers receive their packages quickly, it’s a sure-fire way to put environmental goals on the back burner. Since only 38% of consumers worldwide say they believe retailers are doing a good job using sustainable delivery protocols, according to Descartes data, maintaining eco-friendliness is more critical now than ever.

    • Labor disputes — Gig workers cannot take legal action against the contracted corporation during labor disputes. With Biden’s recent revision to the Fair Labor Standards Act’s definition of an employee, last-mile providers operating on a gig-based system may need to alter their business models.

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Publish date

April 22, 2024

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How the Right Transportation Management Software Can Reduce Labor Costs 

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As digital transformation continues to accelerate customer expectations for shipping speeds, inefficient, manual transportation management can be devastating to productivity. On top of slowing down processes, operations that rely on spreadsheets and cumbersome management methods quickly rack up unnecessary costs from inefficiency, especially when it comes to labor. That’s why transportation and shipping software is so important: it can provide frontline workers with the tools they need to work more efficiently, streamline operations, help optimize routes, automate processes, and even help small, medium-sized, and large operations function at the same level.

The right transportation and shipping software doesn’t just streamline operations and reduce different types of transport costs — it can generate significant savings on labor expenses at a time when profit margins need extra protection. Here’s what you need to know about reducing labor expenses and transportation costs with the right software.

How Transportation and Shipping Software Reduces Labor Costs  

Implementing a transportation and shipping platform is essential for streamlining operations and reducing transportation costs amid record-setting inflation. However, making processes more efficient through digitalization doesn’t just make life easier for employees — each of these benefits plays a direct role in reducing labor costs as well:

Streamlined Route Planning and Carrier Consolidations 

Manual logistics planning requires employees to painstakingly track variables like delivery schedules, vehicle capacities, and traffic conditions to create the most efficient and cost-effective routes and shipments. With such an overwhelming amount of information to juggle, not only do workers make more mistakes in planning — but the menial work also eats up a lot of labor hours. 

Transportation and shipping software automates route planning, scheduling, and carrier consolidation by using algorithms to easily identify opportunities to optimize each delivery. This eliminates much of the most mentally taxing work involved in planning and scheduling, which is especially important for small operations where the workforce may already be overutilized, and saves time in addition to reducing errors. By deploying transportation software, companies can easily scale their shipping volume without straining or expanding labor resources to maximize profit margins. In fact, BarProducts.com was able to reduce their labor expenses by 75%, and even lowered their error rate in the process. 

Reduced Administrative Burden 

When using spreadsheets and paper-based systems, employees have to manually enter and manage order, shipment, and invoice data — all critical and time-consuming work that can take many labor hours. The time and effort involved in coordinating with carriers and managing compliance documents only exacerbates labor and different types of transport costs — especially as shipping volumes increase. 

Transportation and shipping software can automate a lot of the tedious administrative processes involved in these operations,  streamlining order entry, shipment tracking, and invoicing, and virtually eliminating manual data entry and paperwork. By automating these tasks, the software not only reduces the risk of errors — it helps employees get more done in less time.

Automated Invoicing, Auditing, and Settlement 

A key benefit of transportation and shipping software is that it helps streamline the entire order process, including invoicing, contract management, and other key financial processes, all the way from the initial order to final settlement. Many platforms feature built-in auditing so users can easily track the status of any transaction within a single user interface.    

The software can also automatically deliver updates about order status, enhancing customer service metrics. Automating these communication tasks doesn’t just improve customer satisfaction and collaboration — it also frees workers to use their time more efficiently and focus on more value-driven tasks that increase revenue.

Integrations

With manual transportation management processes, employees must painstakingly move or replicate information across the different systems they use for order tracking, route planning, and other critical tasks. Integrations enable users to automatically export or sync data with other systems, reducing the need for manual data entry and the risk of errors, unifying workflows, and even expanding the types of services available to customers. This capability reduces time wasted and improves overall productivity, dramatically reducing labor and transportation costs in the process. 

3G: The Right Transportation and Shipping Software for the Job 

Controlling labor and transportation costs is critical for shippers to remain competitive in today’s ultra-efficient logistics environment — regardless of the size of their operation. Leading-edge transportation software can be a game-changer for companies that have outgrown spreadsheets and other manual methods of tracking their shipment. 

3G offers a full suite of software solutions to help optimize routing, trailer packing, carrier selection, invoicing, and other critical business processes — all crucial to holistically reducing labor and transportation costs. Experience the 3G difference with a free product demo. 

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April 10, 2024

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Recurring Costs Associated With Legacy Transportation Management Software in Shipping 

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Supply chains are only becoming more complex in terms of scale and the speed with which they move goods. With each passing day, we also see more and more of how limiting it is to use manual systems and track shipments with multiple tools, making it difficult to handle the high volume of shipments necessary to compete in this landscape. This gap in performance is now leading to inefficiencies, a high number of errors, and a lack of real-time visibility into the supply chain. 

When you continue to rely on manual systems to manage your shipments, you’re not just slowing down processes and inconveniencing employees — you’re also incurring tangible and unnecessary expenses for your operations, eating into profit margins and long-term success. Digital transportation management solutions are key to breaking through to higher profit margins. 

The Cost of Legacy Transportation Management Solutions 

Software has evolved to streamline every aspect of transportation management, but many shippers still use paper-based logs, spreadsheets, email chains, and phone calls to get everything done. Even when operations utilize more advanced digital tools, capabilities can be spread out across multiple solutions, creating more manual touchpoints and data silos. These inefficient methods of managing shipments use a variety of techniques and tools, but have one thing in common: They’re time-consuming, labor-intensive, and much more costly than necessary. Using these systems not only hinders your company’s productivity but can also incur additional expenses. 

Increased Labor and Administrative Costs 

Using spreadsheets and manual paper systems to manage complex shipments, order processing, invoicing, and auditing is incredibly labor-intensive. All the extra time workers spend on basic processes adds up to higher labor and administrative costs. In addition, when shipping routes aren’t planned for maximum efficiency, workers may need to build out and process extra shipments to meet order requirements, potentially increasing shipping costs over time. As automation comes to define the industry more, the legacy methods lacking streamlining capabilities dramatically increase labor budgets. 

Higher Shipping Costs 

Because manual processes are so time-consuming and cumbersome, they often hinder decision-making and lead to suboptimal planning. Trying to keep track of so much data in different files, it can be easy to overlook the best routes or identify the best carrier rates, leading to missed opportunities for savings. As a result, shippers might select more expensive carriers or inefficient routes, ultimately increasing overall shipping costs for companies. 

Excessive Inventory Costs 

Across the board, a lack of real-time visibility into inventory levels and efficient routes can cause shippers to hold more inventory than necessary, leading to increased warehousing and other costs. It encourages shippers to maintain higher inventory levels to avoid delays, requiring more storage space to hold the excessive inventory, ultimately increasing storage costs and tying up cash in items they might not need. The inefficient routing associated with legacy systems also leads shippers to build up safety stock to avoid delays in customer orders. 

Unnecessary Fuel Spending 

In addition to keeping drivers out on the road longer than necessary, poor and inefficient route planning extends mileage, resulting in higher fuel costs. The poor route visibility associated with legacy systems can also make it easy to overlook retailers with better fuel rates, causing drivers to spend more at the pump on top of driving unnecessary miles. 

Surprise Fees and Charges 

When routes aren’t optimized, drivers are likely to face delays in loading and unloading, resulting in detention fees and other charges from carriers. Drivers must also follow strict regulations about the number of hours they spend on the road before needing a break. Poor route planning can increase the number of layovers they require, potentially incurring additional costs. These unexpected fees add up quickly and can have a substantial impact on transportation budgets. 

Higher Risk of Error 

Manual spreadsheet and paper log systems create a higher risk of human error in order processing (such as delivery address data and shipping piece counts), or in meeting regulatory compliance standards, such as documenting driver hours of service, emissions data, and vehicle maintenance. Small mistakes can result in costly fines and penalties from regulators. What’s more, compliance mistakes with carrier and partner contracts can jeopardize relationships and even leave shippers open to lawsuits or lost revenue. 

Escape Recurring Costs With Transportation Management Solutions 

Spreadsheets, paper logs, and other manual transportation management methods may be cheap to implement, but the inefficiencies and errors cost shippers dearly in the long run. And unfortunately, upgrading to multiple digital solutions can leave your workflow just as scattered and cumbersome. What shippers really need is a unified transportation management solution that allows users to implement more automation, consolidate data for reporting, and integrate more effectively with other systems. 

A unified platform streamlines route planning, order management, carrier selection, freight payment, and more, allowing users to cut labor costs, reduce shipping fees, avoid accessorial charges, and more. Want to enter a new era of transportation management? Schedule a demo with 3G, today. 

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April 10, 2024

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The ROI Potential of a High-Quality Transportation Suite

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The logistics landscape is rapidly changing amid growing supply chain complexity, evolving customer demands, and global inflation. Shippers are caught in the middle of this upheaval, required to adapt quickly while maintaining profits. In this environment, embracing digital transformation is essential for shippers to remain competitive.

A transportation suite can help shippers overcome many of these challenges but comes with a higher upfront price tag than spreadsheet systems. Are they worth the investment? Here’s a look at how users have benefitted from implementation, and what advantages you can expect for your own operation.

The Pillars of a High-Quality Transportation Suite

What is a transportation suite?

A transportation suite is a comprehensive software solution designed to optimize and manage various aspects of transportation and logistics operations within a business or organization and integrates multiple modules and features to provide a holistic approach to transportation management.

In general, a transportation suite enables businesses to automate processes, streamline workflows, reduce costs, improve visibility, and enhance customer service.

What does a transportation suite do?

 

  • Improve Planning: Helps users optimize every shipment, including finding lower rates and consolidating loads to improve efficiency and reduce costs
  • Streamline Execution: Enables fast, reliable, and custom logistics plans while utilizing fewer resources
  • Build Stronger Connections: Facilitates deeper and more efficient collaboration with customers, carriers, vendors, and partners at-scale, and without error
  • Quote & Rate Shop: Rate shop across modes and carriers in a single place, to pick the right service level for the right price on each shipment
  • Improve Shipment Accuracy: Ensure the correct number of pieces are in a shipment or make sure the address is correct before sending to avoid delays and unnecessary fees
  • Shipment Compliance: Helps shippers meet the requirements of trading partners, customs authorities, and the U.S. Department of Transportation when shipping goods
  • Automate Manual Workflows: Streamline operational processes and enhance shipping efficiency by automating manual tasks within the suite

Reaping the Rewards of a Transportation Suite

A transportation suite will likely require a larger upfront investment than manual systems — both in terms of capital and resources for implementation — but it can quickly and dramatically pay itself off once it is in place. What’s more, by automating transportation processes, shippers can transform operations and realize significant cost savings and operational efficiencies that continuously improve profit margins over time.

The suite with the best ROI achieves results across a number of key performance areas — just look at what these companies were able to achieve:

Route Planning

A transportation suite can utilize a wide variety of variables and data points like distance, delivery windows, and carrier rates to quickly identify the most efficient routes for each shipment, minimizing mileage and reducing fuel costs. What’s more, the software allows users to make routing adjustments on the fly if there are changing conditions that could impact delivery. Bemis Manufacturing Company leveraged 3G’s routing capabilities to consolidate and streamline their line haul planning, dramatically reducing the price points for their distribution network below both competition and the industry standard.

Easy Optimization

A transportation suite allows users to quickly and effortlessly optimize multi-stop, less-than-truckload (LTL), and other complex shipments, not only reducing fuel and labor costs but also increasing shipping volume and generating more revenue. These efficiency gains lead to significant cost savings while helping shippers quickly scale operations without utilizing additional resources. In one case, after implementing a TMS, Green Circle Growers was able to generate over $600,000 in savings by better optimizing their multi-stop full truckloads.

Cost Effectiveness

In addition to utilizing map data to optimize routes, a transportation suite integrates directly with carriers for real-time rate visibility, allowing users to make more cost-effective carrier selections. Since transportation suites can track and organize so much on-the-ground data about each shipment, it’s easy for users to assess the performance of different carriers and how each vendor compares in terms of speed and value. Koch Foods was able to reduce freight spending by a double-digit percentage thanks to deeper carrier visibility provided by their TMS.

Maximize ROI With 3G

It’s important to choose a solution with a proven track record of helping users achieve results.

3G offers a full suite of solutions including shipping management platforms, a best-in-class carrier network, and robust ERP integrations, all designed to streamline transportation operations and maximize ROI. Since its inception, 3G has become a top choice for shippers seeking to streamline and scale their operations. Read other customer success stories to learn more about what our platform can do for you.

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Publish date

April 4, 2024

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Over the years, industries like e-commerce have steadily gained their place globally. The internet and technological advancements made it possible to buy and sell goods online, catering to approximately 5.3 billion internet users worldwide and counting. Behind the convenience of ordering goods online is warehousing, which helps facilitate the manufacture, import, export, and transfer of goods to your part of the world.

Business owners or logistics managers who sell physical goods aim to ensure the supply chain process runs smoothly. One solution is effective warehouse management and using 3PL (third-party logistics) with a 3PL warehouse management system.

While this strategy is good for business owners, third-party logistics companies face challenges. Warehouse capacity, workforce, employee safety, shipping cost, and technology are the top concerns of 3PL providers. Third-party logistics operations must continue evolving within all supply chain management aspects to stay competitive.

The Role of 3PL Warehouse Software

There are two main reasons why third-party logistics providers use third-party logistics software in their warehouses. The first is to ensure the efficiency of their services through digitalization, and the second is to improve their customer service by catering to the demands of their customers quickly and accurately.

During the pandemic, we saw the e-commerce industry boom, and with it came enormous demands from consumers. This boom also pushed 3PL providers to improve their processes to minimize the risk of error and ensure that products are delivered accurately when and where they need them.

Here are some key features and functionalities if you want to upgrade your system or know more about 3PL warehouse software.

Key Features and Functionality

Streamlining incoming process

  • Advance shipment notification (ASN) creation
  • Goods receipt
  • Automatic or manual bin assignment
  • Putaway using a mobile application
  • Temperature zones assignment
  • Catchweight-ready

Optimized order fulfillment

  • Create delivery
  • User-controlled wave picking
  • Route-based picking
  • Configurable stock allocation (FEFO, LIFO, etc.)
  • Picking using a mobile app
  • Shelf-life-driven order fulfillment

Better user control in dispatch management

  • Group deliveries into pickups
  • Order verification before dispatch
  • Loading goods and items
  • User-controlled loading bay management

Manage inventory

  • Create scope of physical inventory
  • System-generated counts
  • Perform counting using a mobile app
  • Review and reconcile inventory differences
  • Cycle and blind counting ready

Smart packing and shipping processes

  • Implement multi-level and qualified packing
  • Create smart consignments and consolidate delivery notes into one consignment
  • Print shipping notifications and documents
  • Connect with 250+ carriers out of the box
  • Print shipping labels and generate EDI messages and loading lists

Addressing common warehouse management challenges

Warehouse space or capacity

According to statistics, 80% of respondents from 3PL providers said that capacity is at the top of the list for warehouse management challenges. This is only natural because warehouses and distribution centers are only built based on the business’s needs during construction. Two more reasons for this are the rapid growth of the industry and the price hikes in real estate, which make it hard for warehouses and distribution centers to expand quickly.

To maximize the space of warehouses, 3PLs are starting to consider expanding vertically instead of horizontally. Using customized storage solutions like industrial shelving or pallet racks, warehouses can easily store added items without expanding. It is also helpful to know the layout of the warehouse and use materials that fit the space to improve the 3PL capacity and efficiency.

Lack of skilled labor and labor cost

Next to warehouse capacity, finding, retaining, and training qualified labor is the next big challenge when it comes to warehouse management. This is the effect of the sudden growth in logistics. Companies are expanding, so adding more personnel across job posts is necessary.

The issue then starts when companies need help finding qualified and capable employees to train and stay with them. In turn, businesses need to hire more workers, resulting in higher labor costs, slower business growth, and substandard services that can ruin the company’s reputation. 

To solve this, businesses need to find a way to increase the productivity of their staff by improving how the warehouse is organized. It is tied up with maximizing storage space, and by doing this, businesses can reduce the time needed to search for a product. Automation can also help speed up looking for items when the warehouse is understaffed.

Employee safety

Warehouses can be a risky work environment. Accidents can sometimes happen, and they can injure personnel and damage goods. The issue here is not just about safety but also the consequences that stem from it. The company can lose money paying for medical bills, paying for and replacing damaged products, and dealing with the disrupted warehouse operations.

Reducing accidents and ensuring the safety of the employees means conducting safety training, providing constant reminders of the protocols, and providing personal protective equipment (PPE) for the staff. Aside from the human aspect, regular equipment maintenance should be conducted. An added precaution is to have regular safety audits to identify potential hazards.

Fluctuating demands

Dealing with the fluctuating demands of the market is one of the biggest challenges that warehouse managers face. Consistent orders keep the business running, but even though the boom of the e-commerce industry has helped bring in revenue, 3PL providers have to deal with seasonal demands.

Seasonal demands mean that some products have a higher demand depending on the time of year. 3PL providers are responsible for anticipating when a particular product will have outpouring demand. This foresight is essential because it allows them to get enough inventory when needed or know where to store them when the time comes.

One of the best ways to prepare for this challenge is to conduct market demand research and follow trends, especially for in-demand products. You should also contact your clients to discuss updates and exchange notes about current demands.

Technology

Through the years, technology has become a leading player in improving people’s and businesses’ lives. Faster production, efficiency, and data accuracy are the only ways technology has been helpful in logistics, manufacturing, and e-commerce.

More and more people develop new and more advanced technology, and the need to adapt to better systems cannot be ignored. This also applies to 3PL warehouse management. It is a costly investment, but with the right software, you can easily apply customizations and reap the benefits of updating your system to address the company’s needs.

Choosing the best 3PL warehouse software for the business is a matter of choice. A thorough understanding of their processes is required so that all of the features and functionalities of the software can be effectively implemented. Failing to choose a system that would fit the requirements and needs of the company would only result in wasted technology and high costs.

Benefits of 3PL Warehouse Software

The seamless operation of a warehouse seems easy, but there are many moving parts. It is a complicated business, mainly dealing with large volumes and thousands of products. 3PL warehouse software is a fulfillment solution that replaces outdated and manual tools that may not work. 

Businesses across all industries have realized the benefits of using 3PL warehouse software in warehouse management, supply chain logistics, and business growth.

Scaling and growing business operations

In all businesses, time equates to money. Any downtime in your system is a missed opportunity for the business. The right 3PL warehouse software makes it easy for you to implement and update when you need to. E-commerce, or online shopping alone, is slated to reach about $8.1 trillion by 2026; it is better to anticipate this growth and be prepared to expand your operations in the future.

Cloud-based 3PL warehouse software programs allow you to update and customize your system with just a click, even without knowing how to code. Labor efficiency can also be increased by 40%, speeding up operations.

This convenience will give you more time to focus on time-sensitive tasks and other concerns that need attention.

Improved Inventory Management

Streamlining and simplifying your process is one of the aims of 3PL warehouse software. It also gives you the ability to access updated stock-related data and share it with people who are authorized to see it. Connecting the software with your shipping provider gives instant and real-time data like order status and stock levels.

Added features like producing advance shipping notifications for pick or pack demand, securing login details for your clients, and removing additional labor for creating and consolidating reports can also be possible when your 3PL warehouse software is paired with enterprise resource planning (ERP).

As a 3PL provider, imagine giving your customers a great experience with every transaction. Real-time delivery reports and updates for customers add to a positive customer experience.

Cost Reduction

There’s a reason why it’s essential to do things right the first time, all the time, especially in businesses. Any mistake is tied up with the cost, whether as simple as missing a delivery or an over or underweight in inventory.

75% of shippers reported that using 3PL services has contributed to overall logistics cost reductions. With businesses starting to trust 3PL providers more and more, they should be able to deliver reliable services to be competitive. 

A 3PL management software can help maximize and optimize the use of storage space through warehouse space calculations. Automating the warehouse workflow accomplishes tasks faster with minimal human intervention, which means accuracy and efficiency even with only a few personnel.

Selecting the Right 3PL Warehouse Software

Being clear on the benefits and what a 3PL warehouse software can bring to your business brings us to the question of “How to choose the right 3PL warehouse software?”

Factors to consider in software evaluation

There are multiple 3PL management software you can choose from, but what’s important is to pick the one that suits your needs the most. Below are nine key factors that you should consider asking for when looking for 3PL software.

  1. Easy Onboarding Process
  2. Integration
  3. Functions for scalability
  4. Advanced billing and report generation
  5. Login portal for clients
  6. Configuration or customizability
  7. Multi-client management
  8. Specialized inventory control functionality and tracking
  9. Customer support

To make your decision-making more manageable, here’s a checklist from Veracore where you can conduct a primary assessment of your needs based on the nine critical factors mentioned above.

Adapting to future trends is good, but knowing the technology your competitors are adapting to can give you an idea of whether you need to keep up with these trends or wait it out. This lets you look at your business and see where it stands versus other 3PL providers.

Integration with emerging technologies

You can integrate different technologies with your 3PL warehouse management software. These technologies can give you an edge in the evolving 3PL warehouse management landscape.

Augmented Reality (AR)

AR can be advantageous for your personnel when looking for the best routes around the warehouse and accessing real-time information about inventory status.

Virtual Reality (VR)

VR can be used for employee training and the onboarding process. The business can add a module where the staff can practice their skills in a virtual environment, which will help speed up the learning curve.

Delivery Drones

Drones are not limited to surveillance anymore; they can also be utilized in deliveries. Drones can provide faster delivery, particularly to traffic-congested or hard-to-reach areas.

As mentioned earlier, adapting to these emerging technologies is based on whether there is a need for the business to integrate them.

Final Thoughts

The use of 3PL WMS eases warehouse management pain points. The issues this software addresses give you a better opportunity to fine-tune your system and focus on tasks like planning and forecasting so you can be prepared for the coming months or years.

Third-party logistics services are becoming more competitive and in demand. An upgrade of your 3PL warehouse software might be a good idea if the business is growing rapidly, as it could only mean better service for your customers and higher revenue.

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Optimizing LTL Freight Shipping With A Transportation Management System (TMS)

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Third-party logistics providers offering less-than-truckload (LTL) freight and shipping options are subject to several challenges. From insufficient consolidation to poor pricing and cost management to unsatisfying transit time variability, shippers become bogged down by the weight of these burdens. But the right transportation management system (TMS) can change that.

Implementing a TMS solution can automate documentation creation, provide effective route planning, fill trailers to the safe maximum weight, and enhance all aspects of the operation. With such newfound efficiency, companies can stay ahead of the always-advancing competitive curve, exceed client expectations, and overcome obstacles with relative ease and speed.

The world is only set to become increasingly digitized. Still, with a high-quality transportation management system, 3PL LTL and other shippers, won’t need to worry about being kicked to the side.

Understanding LTL Freight Shipping

Less-than-truckload shipping is a transportation type used when the shipment’s size or weight doesn’t require a full truckload. In this industry, multiple customer shipments are consolidated into one truckload, spreading the cost and sharing the space for more efficient fuel and resource usage. 

Unlike FTL (full truckload) shipping, which fills whole trucks, LTL shipments are smaller quantities and use only a fraction of trailer space. So, shippers with smaller volumes share transportation costs with another shipper, benefitting from lower prices, competitive rates and boosted flexibility.

Despite the benefits of LTL freight services, a few common challenges create significant pain points unless sufficient systems are in place.

Common LTL Freight Logistics Challenges

Difficulties exist in all industries. However, those in the less-than-truckload sector are particularly grueling, covering everything from competitive pricing, and cost management to communication, compliance, visibility to transit time variability, and insufficient consolidation. Discovering the details of each challenge ensures leaders are ready to manage them, proactively preventing profit-losing downtimes in the future.

  • Insufficient consolidation — Consolidation is the bread and butter of the less-than-truckload freight logistics. It’s the ticket to effective route planning, optimally utilizing trailer space, and adequately planning loads. Insufficient consolidation leads to improper routing, poor LTL shipment load planning, and nonsensical trailer space utilization. Ultimately, these factors can reduce provider reputation, damage present client relationships, reduce cash flow, cause resource loss, and cause many more unfortunate happenings.
  • Pricing and cost management — Controlling costs and managing the pricing side of LTL shipping presents a considerable challenge for business leaders. Everything from weight to accessorial charges to distance to shipment dimensions contributes to the pricing of a particular order. Providers work tirelessly to provide accurate prices to their customers. Still, they fail to offer a consistent scale without the proper technological installations, as cost management is a near-impossible task. 
  • Transit time variability — Customers don’t want unreliable shipping times, especially since providers like Amazon provide exceptionally speedy and dependable shipping dates. However, variability in LTL freight shipping is a common occurrence. The “hub-and-spoke” business model is crucial to this type of shipping, meaning shipments can pass through several legs and get transloaded a few times at terminals before hitting their final-mile delivery section. And the more complex a provider’s network, the more opportunities for missed pick-ups and delays. Thus, delivery days or times in less-than-truckload shipping aren’t typically guaranteed.
  • Communication and visibility — Real-time shipment tracking is a must-have, but it’s incredibly challenging for LTL shippers. There’s very little visibility and minimal communication during the LTL lifecycle, creating difficulties in tracking and managing shipments. Whether it’s adverse conditions, capacity issues, or limited technological infrastructure, this part of the industry is plagued with visibility tribulations.
  • Compliance — Non-compliance with regulations can bring about hefty fines, lengthy delays, and considerable reputational damage for LTL freight shipping providers. However, standards are constantly changing, meaning leaders must spend a significant portion of their working lives remaining abreast of evolving regulatory additions or adaptations. Plus, professionals must ensure documentation, such as bills of lading, shipping labels, and customs forms, are completed accurately, presenting even more challenges.

The Role of a Transportation Management System (TMS) in Optimizing LTL Freight

Sometimes called a transportation management solution or transportation management software, a TMS provides LTL freight shippers with the technologies they need to plan, execute, and optimize the movement of goods. Whether ingoing or outgoing, the system ensures proper documentation is available, the shipment is compliant, and loads are effectively managed. 

Businesses can rely on the platform for unparalleled visibility in day-to-day operations, trade compliance data, and documentation. This increases the likelihood of shipments arriving on time, regardless of destination locations and of the innate complexities seen in less-than-truckload consolidation.

Transportation management systems are the backbone of the modern LTL freight world, giving professionals the technological power to optimize almost every facet of their operations.

Key Features of TMS for LTL Freight Shipping

Transportation management systems come with seemingly endless lists of features. However, LTL freight shippers will benefit most from the six below:

#1 Remote Access

The most critical feature of transportation management systems for LTL carriers and freight shipping providers is that it gives them the much-needed power of on-the-go knowledge. Remote access allows businesses to know how, when, and where their freight is handled through real-time system access, offering shippers peace of mind through the availability of important information.

Enhanced visibility promotes accountability, too. Boasting consistent, to-the-minute shipment updates, TMSs reduce the time needed to pinpoint issue sources. Leaders know when and where their chains become tangled, helping them rectify the problem quickly and seamlessly.

#2 Load Optimization

Every logistics provider understands the importance of load optimization. However, it becomes even more crucial in the less-than-truckload shipping world. Since no singular shipment fills an entire trailer, professionals must expertly coordinate a plethora of shipments into one truck, multiplying the complexity of the operation. 

Many years ago, this tricky process was an extensive, manual procedure. However, transportation management systems allow LTL freight shipping companies to harness the power of its technology for this purpose, streamlining and accelerating the ordeal.

A TMS has the tools to optimize every load by regulatory requirements and vehicle specifics. Input the truck’s dimensions, save them for later dates, and automatically assign the day’s shipments. Depending on the particular TMS, the load planner may have a 3D feature, allowing professionals to see cargo distributions onscreen.

#3 Route Planning

Route planning is just as vital as load optimization for LTL freight shippers. They may be able to fill a truck, but how it gets to its many destinations is the next most significant hurdle. And yet again, the tools TMS solutions provide can automate the process. 

The best TMSs come with built-in mileage and routing features that consider all aspects of the truck’s journey and automatically produce the most cost-effective, fuel-efficient route, improving operations from the bottom line.

#4 Integration

Creators of transportation management systems understand the cruciality of their products and their ability to work synergistically with current systems. Connectivity across a wide range of platforms is the name of the game in today’s LTL freight shipping world, so TMSs come with innovative features that allow for precisely that.

Whether businesses have a warehouse or order management systems, they can rest easy knowing that their new implementation will slip seamlessly into their workflows. There’s no place for information silos in 2024, and TMS solutions ensure companies can say goodbye to them once and for all.

#5 Payment and Audit

Freight bills can be incredibly complex, mainly where less-than-truckload freight is concerned. Thankfully, transportation management systems remove the headaches from the process. 

Various tools within the accounting features of the program automate invoicing and payments, completing duties like correct application of LTL shipping rates, invoice validation, discrepancy reconciliation, and so much more. By automating the process, companies can ensure they comply with auditing needs, save time, and decrease errors throughout the supply chain.

#6 Reporting and Analytics

Alongside the real-time tracking feature mentioned earlier, TMS software provides real-time analytics and a variety of custom reports for professionals to generate. Generally speaking, businesses use them to monitor predetermined performance indicators to make informed decisions that improve intrinsic workflows and boost profit margins.

That said, such reports are also critical for compliance with various industry standards. By taking advantage of the included analytics, less-than-truckload shippers can stay more appropriately aligned with the regulations set by policymakers.

Addressing LTL Freight Challenges Through TMS Implementation

The features discussed above work in unison to optimize the less-than-truckload freight shipping operations, addressing the challenges mentioned in a previous section as it does so.

Following proper implementation, transportation management software for LTL service providers makes capturing and analyzing data from across the business a breeze. Generating comprehensive reports becomes a non-issue, giving profound insights into potential opportunities for further optimization and value-adding decisions.

That said, TMS truly comes into its own when preventing the difficulty of insufficient consolidation. Its automation allows professionals to rapidly and accurately fill trailers with appropriate shipments, even when picked up at different points.

Benefits of Optimizing LTL Freight Shipping with TMS

Beyond its ability to address the challenges mentioned earlier, TMS offers several benefits, including:

Improved Operational Efficiency

Efficiency is the answer to longevity, but freight operations are complex processes. So, how can the LTL industry and freight services providers overcome the complexities and offer seamlessness within their operations? By using a transportation management system to:

  • Track shipping lifecycles;
  • Optimize routes based on fuel efficiency;
  • Plan loads to utilize trailer space effectively; 
  • Reduce human error through label and documentation automation;
  • Improve resource allocation and planning.

Less-than-truckload freight shippers who firmly rely on a high-quality, integrated TMS are more likely to reap overall efficiency-improving benefits.

Enhanced Visibility and Tracking

LTL freight class shippers need complete transparency with their clients in this day and age. As such, they require all information at their fingertips — a near-impossible feat without the technological prowess of transportation management systems. 

Providing to-the-minute tracking updates to clients is one of the primary ways to exceed expectations in 2024 and beyond. TMS uses the ever-advancing Internet of Things to monitor trucks at all times, offering perfect visibility to users and their customers.

Beyond automatic shipping notifications, less-than-truckload shippers can use the information to track shipments, detect delays and communicate transit times and durations to suppliers. Ultimately, this keeps accountability and reliability high, a must-have for LTL freight shipping providers.

Cost Savings and Effective Resource Utilization

Using a TMS as an LTL freight shipper brings excellent cost savings into an otherwise expensive process. System users can reduce shipping costs, administration expenses, and inventory charges as the integrated platform decreases paper usage, automates cost calculation, and uses resources effectively.

Through complex algorithms, the platform generates the best (i.e., most cost-effective) routes for drivers to take and fills each truck to maximum capacity. Saving money and utilizing resources properly in freight movement allows businesses to improve processes in other areas.

Improved Informed Decision-Making

Transportation management systems also give business leaders extensive opportunities to make split-second decisions that will benefit the company in the short- and long-term. Choices need no longer be made without access to in-depth analytics. TMS integration bridges gaps to offer a complete picture of the company before finalizing a decision. That way, leaders can be assured they are making a valuable addition. 

Today’s competition for special services is exceptionally fierce. Thus, only those who can stay adequately ahead of the curve will remain afloat, boosting the necessity of transportation management systems.

How to Implement a Transportation Management System

Implementing a transportation management system is essential for proper uptake, decreased resistance, and meeting goals. Companies should heed the following steps when integrating a new TMS:

#1 Define Goals

As mentioned above, TMSs can benefit LTL freight shipping businesses in many ways, including automated invoices, improved communications, route optimization, enhanced visibility, efficiency optimization, and more. However, the only way to reap such rewards is by understanding how the system will integrate into an existing process. 

Thus, companies should ask themselves the following questions:

  • What does success look like after implementation?
  • What achievements are desired?

Businesses should have a clear picture of what their operations look like post-implementation. This proves much easier with a strategic business plan in place. It helps leaders figure out the potential ROI of the transportation management system.

#2 Find the Best TMS

TMS options are plentiful, but they aren’t all the same. Since there isn’t a one-size-fits-all solution, the wrong TMS can result in lost resources, money, and time. So, choosing the perfect one is essential. To do that, consider the following:

  • Interface — It should be easy to use. After all, everybody throughout the business needs to use the system, so an unnecessarily complex design can sully the implementation. The interface should be intuitive and streamlined, with sensical processes and workflows.
  • Flexibility — Business needs change. Thus, any TMS should be easy to modify based on ever-evolving requirements. As mentioned previously, one size does not fit all.
  • Updates — Transportation management systems must keep up with quick industry changes. Therefore, companies should consider how often the platform updates and its updating processing. Cloud-based provisions are usually the best, offering more frequent and accessible system updates than those housed on servers.
  • Integration — Businesses should consider how the new system will integrate with current ones. For best results, they need to work synergistically. 
  • Accessibility — Whether the TMS is cloud- or server-based affects how easily users can access the information remotely. As the IoT becomes more apparent, having a transportation management system in the cloud will be crucial for successful integration.

#3 Get Staff On Side

Some employees may be resistant to change. After all, it’s a ubiquitous part of human nature. However, leaders need to break through this resistance. Why? Staff members are the key to successful implementation. If they’re happy and willing to use the system, transitioning to new working methods won’t be difficult.

Companies should focus on clear communication and change management to get staff on the side before going live. Following the first two steps, getting people onboard should be more accessible.

#4 Prepare for Success

Intricate preparations can begin once everyone agrees that the change will help the business meet its goals. People should be excited about the new implementation, and this feeling needs to continue. To help it do so, leaders can:

  • Dedicate extra resources to the project.
  • Create a committee to organize and oversee implementation efforts.
  • Acknowledge and create a plan for potential setbacks or challenges.
  • Communicate transparently to ensure people are updated and involved at every stage.
  • Assign a project manager to run the implementation.
  • Meet with relevant stakeholders to talk about integrations with other systems.

#5 Create and Follow a Plan

Depending on what LTL freight shipping businesses want the system to do, implementation can take several days, weeks, or even years. Therefore, having a clear plan (and sticking to said plan) will ensure that teams keep momentum throughout the process. 

Leaders must set a realistic timeframe, alongside budgeting and action points, to guarantee they stay on track. Plus, thorough documentation is necessary to keep moving forward, regardless of the process length.

Statistical Insights into LTL Freight Shipping

Daily necessities, electronic products, medicine and chemistry, and industrial parts are just a few factors driving growth within the LTL freight shipping market between now and 2030. As the demand for such products increases, so will the sector’s expansion. Air, ocean, land, and LTL freight shipments are expected to witness significant growth in the coming years, paving the way for more providers to enter (and stay) on the scene.

However, LTL shippers can’t do it alone — they need the help of a reliable, high-quality TMS to skyrocket them to the dizzying heights of success. It’s already working its magic in several areas, with companies witnessing profound efficiency and cost improvements, as proven by the following statistics:

  • TMS can reduce costs by 5% to 15%.
  • TMS-provided automation saves five to ten minutes per order, reducing labor costs by 3% to 4%.
  • In some cases, TMS reduces lead times by two days.

Integrating TMS with Other Freight Management Systems

A TMS is only as good as its integration capabilities. If it doesn’t work with an LTL provider’s current shipping systems, they won’t find much luck with their latest addition. 

Thankfully, most TMSs work seamlessly with other freight management platforms, ensuring unified workflows in all aspects of the business. Two of the most essential integrations are as follows:

WMS Integration for Streamlined Warehouse Operations

When integrating warehouse management systems and TMSs, the goal is to create a single source of operational truth for providers’ warehouse operators. The dashboard/platform must offer the most accurate, to-the-minute information to the entire organization. 

By combining TMSs and WMSs, LTL freight shipping companies create a one-stop-shop solution that details inventory and shipping data in one easy-to-use location, ensuring greater accuracy, better decision-making, and more effective predictions of shipping needs.

Fleet Tracking System Integration for Enhanced Shipment Visibility

Enmeshing TMS and fleet tracking systems allow businesses to make the most cost-effective decisions. With all the information they need on one screen, leaders can weigh service versus cost in real time without flipping between systems for enhanced accuracy and efficiency.

Integrating fleet tracking with TMS positively impacts ROI on optimization and automation technologies. It’s a win-win!

Experts anticipate these future TMS trends will have a positive impact on LTL freight rates for shippers:

  • The ever-advancing intelligence of IoT devices
  • A more widespread uptake of real-time GPS tracking
  • Automated customer service and support
  • Blockchain technology for supply chain transparency
  • Enhanced machine learning

Final Thoughts

LTL freight shipping companies have plenty to gain from a TMS, including improved reporting and analytics, boosted operational efficiency, ideal visibility and tracking, and effective resource utilization. With a full-spec transportation management system by their side, the sky is the limit.

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How To Use TMS Software To Revolutionize Your Freight Operations

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Alongside warehousing and manufacturing, transportation plays a significant role in the supply chain. Many processes must be appropriately handled, from delivery planning to shipment tracking to carrier management, to ensure efficient, money-making freight operations. And that’s where TMS software comes into play.

TMS software (otherwise known as transportation management software) assists in the planning and execution of the physical movement of goods. Its features are designed to automate and streamline essential workflows to increase profit margins, improve working relationships, and optimize infrastructure.

Today’s freight operations landscape is mired with challenges, including shipment coordination, ever-rising customer service demands, and tracking problems. Still, the right TMS software can minimize or eliminate these difficulties.

Understanding TMS Software

A transportation management system’s primary function is planning, ensuring operational efficiency, and seamlessness for freight operations. Utilized by all supply chain members and vendors, including manufacturers, distributors, and 3PLs, it’s the backbone of shipment coordination and execution in the modern world. With it, companies can stay within the competitive curve.

In other words, TMS software is a control tower that oversees the entire shipment process. It does everything, from capturing data in real-time using EDI and API technology to automatically generating bills of lading, creating shipping labels, sorting tendering, and more.

Key Features and Functionalities

As the above would suggest, this software category boasts many features and functions worth exploring to understand the full extent of its power. Some of the core qualities are as follows:

  • Order management — There are two primary functions in order management: order entry and order overview. The former can be manual or automatic and includes filling in essential details, such as commodity, weight, location, and destination. The system then generates a route, assigns transport, and sets ETA. The latter shows created orders to planners and drivers on a seamless dashboard, allowing them to manage their day’s workload.
  • Tendering — Most high-quality TMS software tenders shipments automatically. Carrier lists are organized so users can access the vendor according to predetermined parameters or let the system assign carriers. The majority boast many tendering methods, commonly status, broadcast, and waterfall. Some offer auto-award, least-cost, service-based allocations, and other tendering strategies.
  • Shipment rate management — This is unarguably one of the most crucial elements of a TMS. A rate engine calculates the transportation rates for the truckload, parcel, intermodal, or LTL shipping based on specific rules (i.e., base rates, contract agreements, and discounts). The best transportation management systems craft custom pricing rules to allow for complex tariffs and the automatic sending of client quotes.
  • Load planning — The load planner lets freight companies plan the loading space inside containers, trucks, and trailers. The software considers the maximum loads and weight, instantly calculating the free loading space. Users must input vehicle measurements once and save them for future reference. Some systems come with a 3D load plan feature, allowing professionals to see the cargo distribution in the space.
  • Fleet management — TMSs let fleet managers see all their assets in one place. Not all transportation management systems come with advanced fleet management features, but even the most basic boasts the ability to assign drivers, select equipment, manage dispatch, and deal with financial settlements for drivers. Those with dedicated fleet management integrations offer fuel consumption control, environmental impact, and tracking maintenance activity.
  • Dock scheduling/yard operations — Shippers typically spend their days scheduling dock appointments, while drivers waste time sitting in a queue. However, integrating a TMS with a yard management system or WMS ensures automated dock scheduling and load sequencing for boosted efficiency and workflow. It collates all warehouse and transportation constraints in one place, affording workers more accurate schedules. This key feature proves particularly beneficial for freight companies looking to boost their customer service, as load statuses are always available.
  • Documentation management — Transportation is a paperwork-heavy process. However, TMSs let companies automate many aspects, including invoice creation, digital bills of lading generation, shipment label production, and freight auditing conduct. Streamlining billing and invoicing is a significant pain point for many freight businesses, but modern transportation management systems eradicate it through automation.
  • Connectivity portals — Most TMS software connects customers and partners via email. However, higher-end solutions go a few steps further, allowing users to customize self-service portals. In other words, companies can allow their customers to create and view their order statuses while they publish tender offers and review/submit invoices.
  • Tracking and tracing management — The latest track and trace tech lets companies track the movement of items in real-time, eliminating the need to contact the driver to discover the truck’s location. This feature typically gives customers accurate information on their shipment location and for scheduling and security purposes. For the function to work, a telematics device inside the truck/on the driver’s smartphone links to the TMS via GSM, UMTS, or GPRS. 
  • Analytics and business intelligence — Alongside real-time tracking, TMS software offers real-time analytics and a range of custom reports for management professionals to generate. Professionals tend to use them to monitor various performance indicators and make informed decisions that improve operational workflows and enhance profit margins. Providing businesses utilize a top-notch TMS provider; the BI capabilities are limitless.

Addressing Common Challenges in Freight Management

When TMS software is implemented effectively, the features mentioned above work wonders to address the top four common challenges experienced in freight management

#1 Coordinating Shipments

The supply chain is more globalized than ever, necessitating cross-border international shipment coordination. However, this is easier said than achieved due to the ever-changing local regulations, language barriers, and complex international customs procedures.

Advanced carrier TMS software applications automatically consider the above, smoothing the otherwise arduous carrier coordination task and ensuring freight is moved on time and within budget.

#2 Visibility and Tracking

Companies are increasingly struggling to keep up with shipments due to the need for accurate tracking information and visibility throughout the supply chain.

Tackling the issue requires a high-quality transportation management system that utilizes IoT telematics to allow users to see the progress of their shipments in real-time. With this to-the-minute information, they can make decisions to prevent delays or other problems.

#3 Customer Service

Titans like Amazon have made people incredibly impatient when waiting for deliveries — if it isn’t fast, they aren’t happy. As such, freight operators are under even more pressure to provide timely, responsive services, regardless of where their customers are located. And with that, the need for a reliable technological solution like TMS software becomes obvious.

#4 Documentation

Depending on customs and the type of goods, a slew of documentation may be needed. Whether it’s permits, clearances, pro forma invoices, certifications of compliance, or something else entirely, the manual creation of such paperwork needs to be revised and more manageable. Luckily, TMSs shine in this situation, automating the generation of necessary documents.

Benefits of Implementing TMS Software

The benefits of implementing TMS software are plentiful due to the innate breadth of the platform. However, the top three are easy to discern. They are as follows:

Improved Operational Efficiency

It’s no secret that freight operations are complex processes. Thus, efficiency is the ticket to long-term success — and TMS software helps carriers achieve that by:

  • tracking shipping lifecycles
  • optimizing routing
  • aligning dock scheduling
  • reducing human error through documentation, label, and fulfillment automation
  • improving warehouse productivity

The more businesses take advantage of all the features provided by TMS solutions, the greater the efficiency-improving benefits become.

Enhanced Visibility and Tracking

TMS software makes transparency across the entire supply chain a reality. It combines all process data into one place, giving companies previously unachievable levels of real-time access, thus allowing them to recognize and act upon possible pain points promptly and effectively.

Likewise, the solution provides to-the-minute shipment tracking, allowing organizations to make necessary adjustments to avoid service outages. The software automatically calculates the route time, developing more realistic schedules.

Real-Time Data Insights for Informed Decision-Making

Similarly to the above, transportation management systems give companies real-time data insights about every supply chain section. No stone is left unturned, giving leaders the best chance of making value-adding organizational decisions. Today’s industry competition is fierce, and only those who can stay ahead of the curve will remain afloat. 

How to Select the Right TMS Software

Deciding on the perfect TMS software is essential to achieve the desired effect. As such, leaders should pay close attention to the steps set out below to increase the likelihood of making the best choice:

  1. Consider current technology environment — TMS software must integrate with current technological capabilities to be effective. Assessing present capabilities and future needs ensures that companies know the features they should look for in their TMS. For example, companies already invested in a CRM may not need a one-stop-shop-esque transportation management system. Helpful questions to ask at this stage include:
    1. How old is the current system?
    2. Are they sustainable?
    3. Does the current system already include reporting platforms or CRMs?
    4. What are the positive and negative sides of the current system?
  2. Decide the budget — TMS platforms can be costly, especially when custom solutions integrate with standard features. While the improvements gained are worth the price, it’s still important to consider the maximum investment to avoid going over budget. This should include the total cost of ownership.
  3. Define goals — Outlining goals for the new transportation management system creates a checklist by which companies can evaluate each vendor. Plus, it ensures budgets aren’t wasted on less-than-satisfactory software. Some benefits or goals may include:
    1. boosted visibility
    2. bottom-line savings
    3. time savings
    4. transaction automation
    5. top-line growth
    6. efficiency improvements
  4. Ask questions — When evaluating providers, companies should ask as many questions as possible to ensure their needs are met. The easiest way to do this? Create a list of queries in advance. While the specifics may vary from business to business, the most crucial include:
    1. Will the TMS work for the type of freight moved?
    2. How much time can the system save?
    3. What systems does it integrate with?
    4. How are updates handled?
    5. What ROI can be expected?
    6. What sets the provider apart from the rest?

8 Factors to Consider

A comprehensive checklist of all the features/functions desired is essential to ensure the right software is purchased. Companies should use the following as a guide for everything high-quality applications offer:

#1 Custom Options

There’s rarely a one-size-fits-all option where freight operations are concerned, and TMS software is no different. Companies should examine the customization options of their preferred logistics service providers to ensure the platform will genuinely enhance workflows and operations rather than hinder them. In other words, it must be flexible to support and improve business requirements.

#2 Automation

Without automation, TMS software becomes nothing more than a cumbersome spreadsheet collector. Therefore, an automated solution is essential for efficiency and workflow optimization. 

Many elements of freight operations can be automated with the right logistics platform, including:

  • alerts
  • document generation
  • ELDs
  • geofencing
  • tracking
  • load board integrations
  • emails
  • settlements
  • and more

Some advanced options provide point-and-click facilities to build workflows on the go — no coding required!

#3 Centralized Communication

TMSs must facilitate team collaboration by gathering all communications in one easy-to-use place. Integrated messaging must be involved in every workflow, ensuring visibility for teams and customers.

The integrated messaging platform should offer supreme functionality, making it the “record of truth” for all business communication. In-use email servers should easily integrate with the software for best results.

#4 Mobile Access

The chosen TMS should offer role-based profiles to provide every staff member with the system and data they need to conduct and execute their core responsibilities. Setting up permissions and access hierarchies is an integral but easily overlooked part of a transportation management system. It is one of the most crucial aspects to consider when choosing the best transportation services vendor.

#5 Billing Capabilities

Companies don’t have the same billing methods or types. Therefore, the TMS software must have fully functioning billing capabilities to suit the company’s specific transactions. Most platforms offer a wide range, but checking before committing to a single solution is always best.

#6 Flexibility and Scalability

Some providers have gated models with limited functionality and a set user number, forcing businesses to move to the next bundle for full functionality. To avoid this, businesses should look for comprehensive TMS solutions with unlimited users at zero extra cost and immediate access to all the features.

#7 User-Friendliness

Transportation management system software must be easy to navigate, boasting an intuitive user interface. After all, it’s a near-useless addition if those who need to utilize it can’t get to grips with the platform!

Additionally, the interface should be customizable to the needs of the business, with various built-in features that simplify daily operations.

#8 Vendor Reliability and Support

A TMS is only as good as its development team, so reliability and support are significant factors to consider when choosing the perfect solution. The software deserves high marks if the developers offer more than code customizations.

Customer service teams should be responsive to comments and concerns, incorporating relevant improvements into their system upgrades. 

Implementation and Integration

Choosing the software is only part of the deal. Companies must also implement and integrate the desired TMS solution appropriately. Follow the recommended steps to ensure businesses avoid poor adoption and reap the system’s full benefits.

7 Steps for Implementing and Integrating TMS Software

  1. Create an implementation team comprised of employees from wide-ranging backgrounds. 
  2. Make a plan with clear objectives and goals to ensure the investment pays off.
  3. Use the factors above as a checklist to evaluate the various TMS platforms on the market.
  4. Spend time demoing the platforms to analyze the various functionalities each offers.
  5. Carefully plan the transition, offering sufficient training to combat the poor adoption potential. 
  6. Prioritize integration requirements.
  7. Allocate staff before going live to offer users plenty of support during the initial rollout. 

Security and Compliance Considerations

Both data security and industry compliance are imperative in the logistics industry. As the sector becomes increasingly complex, businesses can only remain abreast of all the information if they employ a technological solution.

Ensuring Data Security

Cybersecurity is an increasingly important aspect of any software adoption. As such, the best TMS platforms offer a wealth of security-enhancing facilities, including:

  • Data encryption during transit and at rest
  • Intricate access control and authentication
  • Data anonymization and pseudonymization
  • Data and activity auditing and monitoring

Complying with Industry Standards and Regulations

Compliance is critical. Businesses must comply with regulations and laws surrounding vehicle maintenance, driver hours, documentation, and qualifications. TMS software helps companies remain compliant by automating the process of document generation and driver hour tracking.

Overcoming Challenges in TMS Adoption

Even the best-laid plans can go awry — and adopting TMS software is no different. Thankfully, those who realize the potential for things to go wrong can take proactive measures to prevent the struggles from happening.

TMS Software Hurdles and Solutions

Challenge Solution
Limited/No integration with current systems Ensure the TMS software is compatible with other systems used in the company. Custom integrations may be necessary.
Employees are resistance to change Involve employees in the implementation process. Demonstrate benefits of utilizing the new system. Offer incentives/rewards for system utilization.
Users don’t understand the new system Provide sufficient training and support through online tutorials, helpdesks, and in-person training sessions.
Initial investment cost Look at scalable solutions for gradual implementation.

The Growing TMS Use Trend

TMS software use has seen exceptional growth since 2013. However, during the pandemic, things really kicked up a gear, as cloud-based transportation management system solutions made it possible for people to transition to remote work without noticeable disruptions. And this is only set to continue as the popularity of autonomous and connected vehicles keeps booming.

The World Economic Forum noted that digitalization in logistics could unlock a whopping $1.5 trillion by 2025, spurring an ever-growing 35% of businesses to use the platform for transportation network management. 

Those who’ve implemented the software have reported shipping cost savings of 5% to 15%, thanks to the automation and optimization of loads, rates, and modes. Plus, teams have spent 75% to 85% less time managing loads and assigning loads after implementing a TMS.

TMS Software Success Stories

It’s no wonder TMS software is witnessing supreme growth — industry titans have nothing but praise for the application!

The finance director at AW Jenkinson Transport notes, “The facility is leading to definite benefits in improved load allocation,” and the managing director at TWE Haulage says, “We can now invoice straight away, increasing cashflow by four or five days.”

Likewise, Jenny Hill from Jentone Freight mentions they’ve ” achieved many things we could never have achieved with paper-based systems.”

Today’s TMS software is already brilliant, but the advancement is only set to gain pace, with a few of the following trends expected to appear in the near future:

  • Optimized visibility advancements will bring even more accuracy to real-time shipping information. Couple that with IoT telematics. This trend will help reduce delays, boost supply chain efficiency, and detect inefficiencies early.
  • Unprecedented security is set to come to such applications thanks to the increased use of end-to-end data protection, transparency measures, and role-based access controls.
  • Inter-management collaboration is a fast-approaching trend for the industry, with TMSs boosting communication to achieve higher ROIs and lower shipping rates.

Transportation management software can transform freight operations and future-proof businesses of all shapes and sizes. Whether companies desire basic features or the most advanced capabilities, there is a carrier TMS software solution to suit them.

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February 8, 2024

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The traditional logistics model faces several significant inefficiencies, often characterized by manual operations and disjointed communication systems. 3PL software eliminates many of these by providing sophisticated procurement, warehousing, transportation, and customer service solutions. By automating and optimizing these processes, 3PL software can significantly reduce the risks of errors and delays that are often part and parcel of manual systems. It enhances route planning, offers real-time visibility into logistics operations, and supports data-driven decision-making, sometimes leading to significant cost reductions.

81% of shippers prioritize service quality in their 3PL partnerships, compared to 19% who consider cost as the primary factor – and this is skewing more towards service each year. This trend underscores the growing importance of quality service delivery in the 3PL industry, reflecting a broader recognition of the value added by these sophisticated logistics solutions​​.

Challenges in Traditional Logistics

The third-party logistics industry is complex and involves numerous processes, such as procurement, production, sales, inventory management, warehousing, transportation, and customer service. Traditional third-party logistics services are when a business manually carries out the entire process and uses conventional communication methods.

Because everything is done manually, there is a high risk of limited visibility and inefficiencies in route planning. Phone calls, spreadsheets, and paper-based systems often slow down processes and cause errors and delays, increasing expenses.

Traditional third party logistics providers face many challenges that often lead to inefficiencies, such as:

  • Increased Risk of Delays and Errors: Many businesses still rely on traditional logistics operations that use paper-based documentation, manual data entry, and phone calls for communication, which are very slow but significantly increase the risk of delays and human error.
  • Inefficient Route Planning: Route planning can be less than optimal and time-consuming when no intelligent systems can offer assistance, leading to more significant fuel spending and further delays.
  • Lack of Real-Time Visibility: Without a centralized system for tracking processes like inventory management, shipments, or the location of delivery vehicles can be problematic, leading to the lack of real-time information, which increases the risk of mismanagement.
  • Lack of Data-Driven Decision-Making: The absence of real-time analytics and insights such as inventory levels, staff performance, and other crucial business information often results in inefficiencies and complex decision-making.

These inefficiencies negatively impact different aspects of the business, namely cost reduction, which can lead to:

  • Increased Operational Costs: Doing everything manually means higher labor and inefficient routes mean higher fuel costs, which increases the business’ overall expenses.
  • Delays and Inaccuracies: As mentioned, manual processes cause a lack of real-time visibility, which can negatively impact inventory levels and shipments.
  • Customer Dissatisfaction: Customers expect a fast and smooth purchase process, from ordering to delivering the product. Inefficiencies in the logistics chain may cause missed deadlines and incorrect shipments, which increases the risk of dissatisfied customers and even loss of business.

The Role of 3PL Software in Transforming Operations

3PL software enables third-party logistics companies to execute supply chain logistics, warehousing processes, and fulfillment for one or more clients. This can include processes such as receiving, putaway, picking, packing, shipping, inventory management, returns, and replenishment, all of which can be integrated with other solutions to streamline operational data further.

Third-party logistics software links the various aspects of operations, such as e-commerce channels, accounting software, shipping carriers, fulfillment centers and networks, and more. It provides businesses with the control and end-to-end visibility they need for optimal operations while providing customers with order statuses and insights.

Good 3PL software is characterized by advanced automation capabilities that provide businesses with efficient fulfillment options, fulfill clients’ budgets, and meet customers’ delivery expectations.

Key Features and Capabilities of 3PL Software

While features vary with individual 3PL systems, the typical features and capabilities of 3PL software include:

  1. Order Management: Enables efficient processing and tracking of orders and provides real-time updates to internal teams and customers.
  2. Inventory Management: Provides accurate inventory tracking to manage multiple locations and inventory forecasts to avoid overstocking or stockouts.
  3. Warehouse Management: Manages the warehouse layout, organizes inventory, and streamlines warehouse processes such as picking, packing, and shipping.
  4. Transportation Management: Manages and tracks shipments in transit and optimizes routes for cost-effective transportation.
  5. Billing and Invoicing: Automates billing and invoicing for all services the business provides and tracks and charges for handling, storage, and transportation costs.
  6. Analytics and Reporting: Monitors KPIs and produces data-driven insights that can benefit decision-making and continuous improvement.
  7. Visibility for Clients and Customers: Clients can view their inventory, orders, and shipments in real-time, which enhances transparency and contributes to customer satisfaction.
  8. Integration Capabilities: Businesses can easily integrate the software with other systems, such as ERP systems and e-commerce platforms, and set up data exchange and workflow automation, which enhance efficiency.
  9. Regulatory Support: Manages compliance for specialized products (like hazardous materials) and ensures that operations adhere to industry-specific standards and regulations.
  10. Customization and Scalability: Enables customization to accommodate specific needs of supply chain management and individual clients, adapts to evolving business needs, and accommodates expanding client base and increases in inventory and orders.

Advantages and Impact on Efficiency

Streamlines Order Fulfillment

3PL software solutions automate crucial processes in the supply chain and integrate other systems, saving business and logistics service providers time. As a result, the order fulfillment process is streamlined, from procurement to delivery.

Outsourcing these processes and utilizing automation speeds up various functions and reduces manual effort and errors by taking on repetitive and time-consuming tasks. Automation also enables businesses to stay on top of each process and ensures that everything goes smoothly, resulting in quicker order processing and delivery. Lastly, automation helps to streamline processes and improve the customer experience, as they can view real-time updates on their orders.

Enhances Inventory Management

Hiring a 3PL company typically means getting access to advanced inventory management systems. Through these specialized systems and advanced technologies, 3PL software provides real-time visibility and control over inventory levels, optimizes routing, identifies areas of improvement, and resolves inefficiencies quickly. 

Its real-time insights and tracking data lower the risk of order errors, minimize stockouts, reduce excess inventory, and improve overall inventory turnover rates. Real-time visibility allows businesses to adapt to changing demands and make timely adjustments.

Improves Customer Communication and Satisfaction

3PL software can track orders and payments from start to finish, and it offers sophisticated tracking systems, which enable customers to view accurate and timely updates on their orders in real-time and make returns easily. It also provides enhanced communication channels that facilitate interaction between the business and its customers so inquiries and concerns are addressed promptly.

Through the software, businesses can offer their customers expedited shipping options like same-day, one-day, and two-day shipping. These features help instill trust and reliability, make cost savings, enhance customer experience, and improve customer retention.

Integration with Emerging Technologies

The 3PL landscape continuously evolves; cutting-edge technologies such as the Internet of Things (IoT) and Artificial Intelligence (AI) profoundly affect its transformation. 

IoT is a network of interconnected devices that collect and exchange data and has technology that enables communication between devices and the cloud. AI is the ability of machines to simulate human intelligence, allowing them to learn, reason, and even make decisions. These technologies play an essential role in improving the capabilities of 3PL software and revolutionizing the logistics sector.

The Internet of Things (IoT)

3PL software that IoT powers utilize sensors and connected devices that are embedded in products, warehouses, and vehicles to collect real-time data. These data include information on environmental conditions, inventory levels, shipment statuses, and more. The large quantities of data collected by IoT allow 3PL providers to use the information to optimize every step of their logistics operations.

Artificial Intelligence (AI)

Integrating AI in 3PL software helps analyze vast amounts of data and extract actionable insights to improve third-party logistics operations. AI is equipped with predictive analytics that forecasts demands, optimizes routes, and facilitates proactive maintenance, enhancing efficiency, transparency, and decision-making within the supply chain.

The predictive models derived from these analytics also identify possible disruptions to the supply chain before they occur.

Automation and Robotics in Warehouse Management

Integrating IoT and AI with 3PL software facilitates easy automation and robotics in supply chain processes. IoT-enabled robotics help in warehouse operations through the use of autonomous vehicles, intelligent machines, and drones. On the other hand, AI-driven algorithms automate routine tasks like picking, packing, and inventory management, increasing speed and accuracy.

Overcoming Implementation Challenges

Like any other innovation, the implementation of 3PL software has its challenges. However, these common hurdles can easily be mitigated with the right strategies.

Common Challenges in Adopting 3PL Software

  • Resistance to Change: Many employees may be accustomed to the traditional way of doing things, and their initial resistance can hinder adoption. 
  • Integration Problems: Introducing new software to existing systems might pose compatibility issues, which can lengthen the adoption process. Problems may arise, including differing file formats, incompatible functionalities, and data transfer challenges between the systems.
  • Inadequate Training: Insufficient employee training on the software’s features and functionalities can contribute to acceptance, which may result in inefficiencies and underutilization.

Strategies for a Smooth Transition and User Adoption

  • Employ Transition Strategies: To help employees overcome resistance, the company should initiate change management programs and provide comprehensive training on the new software. The benefits of the software must be communicated, concerns must be addressed, and employees must be involved in the transition process to build their confidence.
  • Collaborate with the Software Provider: To address integration problems, close collaboration between the software provider and the company’s IT team is necessary. Planning, testing, and clear communication are needed to ensure that compatibility issues are ironed out. Resources like help desks, online tutorials, and user guides can facilitate quick software adoption.
  • Provide Training Programs: To guide and better inform employees about the new software, comprehensive training must be provided to employees of all levels. Training should highlight the software’s benefits and, at the same time, educate employees about its technical aspects.

It would also help businesses implement the 3PL software in phases, for example, in specific departments before full-scale implementation. This approach will enable companies to minimize disruptions and address initial concerns before a full expansion.

With the logistics industry continuing to evolve rapidly and experiencing substantial growth, 3PL companies and software alike are expected to witness the emergence of new technologies and trends. Expected trends include: 

  • Predictive Analytics and Forecasting: 3PL software is expected to continuously rely on predictive analytics and forecasting, as it can provide accurate insights into future demand patterns for better decision-making, improved resource allocation, and swift adaption to market fluctuations.
  • Artificial Intelligence (AI) and Machine Learning (ML): In less than ten years, AI and ML should be an integral part of the 3PL supply chain management with features like demand forecasting, inventory optimization, and route planning.
  • Advanced Robotics and Automation: Operational costs and labor shortages have persisted, so using advanced automation and robotics will become increasingly essential. These innovations will not only address problems with expenses and labor but will also significantly improve efficiency and reduce human error.
  • Blockchain Technology: This technology offers a secure, transparent, and tamper-proof record of transactions that should improve transparency and traceability in the supply chain, enhance data sharing, lower risks of disputes, and identify quick solutions to issues.
  • Sustainable Initiatives: The 3PL industry is predicted to increase its focus on sustainable practices. With an increasing demand for eco-friendly services, 3PL software incorporates features supporting sustainable logistics, such as optimizing transportation routes for reduced emissions, tracking carbon footprint, and improving visibility into supply chain sustainability metrics.

Other notable technologies expected to integrate into 3PL software solutions include Augmented reality (AR), Virtual reality (VR), and drone-based delivery systems.

Security and Compliance Considerations

When utilizing 3PL software, businesses should utilize data security because of the sensitive nature of the information involved. Data protection involves implementing strict measures within the software, encryption protocols to safeguard against possible breaches, and stringent access controls to prevent unauthorized access.

In addition, 3PL software must ensure data integrity, traceability, and transparency through comprehensive documentation. This way, employees can track and validate sensitive data handling, contributing to compliance and building trust among clients and partners. 

Another essential aspect to prioritize when using 3PL software is compliance with industry standards and regulations. Adherence to regulatory bodies such as GDPR and HIPAA or industry-specific standards ensures that operations align with guidelines, promote safety, and avoid penalties. Regular audits and assessments of the software framework must be performed to check compliance and to determine if there are areas for improvement.

Selecting the Right 3PL Software

Here are the main factors to consider when choosing a software solution:

  • Latest Technology: A business should select a 3PL provider with access to the latest technology and utilize software that includes Enterprise Resource Planning (ERP) and Transportation Management Systems (TMS) that can comprehensively manage their logistics operations. The latest 3PL software can help businesses cut expenses by streamlining processes and reducing errors through automation.
  • Scalability: It’s essential to consider the software’s flexibility and scalability. All businesses have the potential to change or grow in the future, and the software should be configurable and adaptable to meet the business’s evolving needs. This includes additional facilities, increased order volumes, new locations, and more.
  • Integration with Existing Systems: Finding software compatible with the business’s existing systems is essential. Seamless integration enables easy data synchronization that eliminates the need for manual processes, reducing errors and improving efficiency. Seek the assistance and support of the software provider for customization and integration.
  • Compliance and Security: Make sure that the chosen software prioritizes compliance and security and has features such as data encryption, strict access controls, and regular system backups. On top of that, the 3PL software should comply with industry regulations to safeguard sensitive information, ensure that goods are correctly labeled, and protect the rights of consumers.
  • Support for Multiple Client Accounts: Multiple divisions are going to use the 3PL software, and several employees may need access to real-time data at the same time, so the software should be able to offer multiple user accounts, which may also increase collaboration and ensure that employees can access the information they need simultaneously.

Industry Best Practices

Build a Strong Foundation

A strong foundation is essential when implementing 3PL software. We often see that businesses need to define their company’s logistics needs before implementing a 3PL software solution. As a result, they usually end up with incompatibilities and inefficiencies.

The best approach would be to build a strong foundation – carefully identify the areas of your logistics company that need improvement and begin from there. It’s also important to remember that these logistics solutions are about improving processes and enhancing relationships with customers.

Be Ready for Change

Integrating 3PL software solutions means a significant shift in a business’s workflow.

Because 3PL software is developed according to best practices, expect significant changes in how things are done around the company, which employees should prepare for.

However, with the proper implementation practices, including testing and comprehensive training, adopting the software’s changes will be more accessible for everyone. 

Ensure Effective Communication

Implementing 3PL software will affect all departments, not only the IT, logistics, and supply chain departments, as most businesses think. This makes communication highly important, making the product adoption effective throughout the organization. 

All employees must be appropriately informed and undergo training to know and understand how the software can affect their jobs. Even if the software is user-friendly, employees of all levels must be knowledgeable about it.

Make Sure that the Technology is Supported

A significant obstacle to supply chain digital transformation is when businesses and employees lack an understanding. Once integrated, the company must provide all personnel with the proper support in using the software.

Collaboration with the IT department and providing sufficient resources will significantly contribute to everyone’s understanding and ultimately improve the business’s logistics operations.

The Bottom Line on 3PL Software

3PL software has proven to be a transformative tool in logistics that enhances the efficiency of various processes in the modern supply chain while lowering expenses and reducing errors. As a result, businesses can focus their time and resources on other important matters such as product development, strategy building, and marketing.

3PL companies must be open and continue embracing innovations and technological advancements, essential for sustained success, as they encourage businesses to adapt to a rapidly changing and competitive sector. More importantly, these technologies help businesses build stronger and more transparent relationships with their clients and customers.

As the logistics landscape continues to change, 3PL companies must leverage new technologies to enhance their services, better serve their clients, remain compliant with standards and regulations, and surpass the expectations of businesses in this highly modern time.

By utilizing 3PL software solutions, small businesses can remain competitive and relevant.

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3G

Publish date

February 2, 2024

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3PLs

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Freight Forwarding Reinvented: Cutting-Edge 3PL Freight Software

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The global third-party logistics (3PL) market is expected to reach a whopping $1.3 trillion value by 2026. However, the various challenges thwarting the industry, such as a distinct lack of collaboration, the ever-changing government regulations, no succinct data hubs, and increasing demand for advanced visibility, require a steadfast solution to keep the industry running smoothly.

Enter technological innovations like 3PL freight software, the ticket to a seamless logistics sector that survives the otherwise devastating worldwide digitalization. From improving efficiency to enhancing tracking to offering real-time data in one cohesive platform, this software challenges traditional methods, future-proofing the freight forwarding market.

Businesses that adopt these platforms sooner rather than later can gain a significant competitive advantage.

Evolution of Freight Forwarding

Traditionally, forwarding agents were mediators who planned the transport of goods from point A to point B. They didn’t own equipment or vehicles or have employees. 

Time travel to the modern world and freight forwarders play a critical role. They still handle goods transportation, but they also:

  • Help process orders when contracted.
  • Coordinate the entire shipping process.
  • Contact shippers to determine the best routes, considering costs, duration, and product type.
  • Work with carriers to prevent delays and ensure safe transportation.
  • Offer various value-added services, like customs clearance, packaging, and warehousing.

This industry evolution has birthed the need for businesses to have near-complete control of their supply chains. Historically, companies would send their goods to the forwarder and wait for them to find a carrier — a delay-filled, expensive process. Nowadays, companies of all shapes and sizes find value in forwarders’ services, thanks to the implementation of innovative tech that’s revolutionized previously inefficient processes.

The Role of 3PL Freight Software

The dramatic shift taken by the industry is mainly due to the massive demand for global trade and the e-commerce boom. Freight forwarders now offer end-to-end logistics solutions made possible through 3PL freight software. With many features and functions (explained below), these programs deftly manage and centralize data, offer real-time visibility and tracking, automate processes, boost efficiency, and supply advanced analytics to increase business profits and secure futures.

Features and Functions of 3PL Freight Software

Every 3PL software is a unified logistics management platform. Yet, they all come with various user interfaces, features, and functions.

That said, the applications worth their salt will have the following standard features:

  • Auto order allocation — These days, automatic order allocation is necessary for 3PL freight software, not a desire. Its smart (i.e., AI-driven) auto-allocation engine chooses the perfect partner based on the 3PL’s performance, SKU type, payment type, order volume, invoices, and more.
  • Route optimization tools — Freight forwarding software allows businesses to meet tight deadlines by planning efficient multi-stop routes. It instantly considers time windows, driver skill, cost, and more to establish the optimal delivery route, saving companies maintenance, labor, and fuel costs. 
  • Carrier performance monitoring — This feature benchmarks 3PL performance based on common non-delivery reasons, the number of on-time deliveries, and other KPIs.
  • Real-time tracking — Dispatchers receive real-time visibility on drivers, giving them unparalleled visibility to establish ETAs, locations, and shipment statuses. 
  • Automatic label generation — Gone are the days of manual label creation and printing. Intelligent 3PL freight software generates labels in the standardized format using the order information from the LSP. This isn’t just convenient for the forwarder but also for the sender and carrier.
  • Returns management — Advanced freight forwarding software automates returns management, improving customer experience and completion times. It instantly assigns the pickup driver while detailing the most efficient route for the job.
  • NDR management — Common non-delivery reasons are sorted into different categories, ensuring businesses can quickly gauge NDRs to relieve pain points.

Addressing Freight Forwarding’s Common Challenges

Freight forwarders face many challenges; with great power comes great responsibility, and while some innate struggles are out of their control, advanced 3PL software can prevent or solve many, such as:

  • Rising consumer visibility expectations — E-commerce giants have ensured people expect low-cost, lightning-fast shipping with almost to-the-minute tracking. Consumers are savvier than ever before, with many craving the real-time tracking enterprises like Amazon provide. The standard (set, as always, by massive corporations) causes many freight forwarding companies to incur significant costs. Yet, it’s worthwhile, as 81% of shippers note that visibility is crucial to their freight forwarder evaluations. Luckily, such agencies can achieve the real-time data dream by providing clients with a centralized data hub through 3PL software.
  • Customs-related delays — Procedural and human errors are the main reasons behind customs delays. However, delays can be avoided altogether with advanced freight forwarding software and process automation.
  • Law and regulations changes — Since logistics plays a huge role in the economy, it’s a popular topic among lawmakers and politicians, provoking near-immediate adjustments and responses from freight forwarders and others in the industry. The software can help said businesses stay aligned with the latest changes, as they’re regularly updated when news releases.
  • Miscommunication — Delayed communication and misinformation cost freight forwarders their clients. The industry is chaotic, but not enough for customers to provide too much sympathy if communication is lax. 3PL software can act as a central communication channel for internal teams and external clients, cutting down on unnecessary phone calls without losing the human aspect of the business.

Benefits of 3PL Freight Software

Aside from alleviating the above challenges, freight forwarding software provides myriad benefits to those who adopt it. New users can expect improved efficiency, enhanced visibility and tracking, and real-time data insights.

Improved Efficiency

Freight forwarding software is a holistic efficiency improver at its core. It’s a game changer for industry participants, regardless of business size, covering everything from LTL coordination and dispatch to label generation and beyond.

Its three-pronged approach tackles freight forwarders’ operations from the below-listed angles to afford efficiency and productivity enhancements across the board:

  • LTL coordination — Without 3PL freight software, forwarders struggle to meet the ever-increasing demands of their clients. As e-commerce continues blossoming, the need to move the supply chain along quickly becomes more crucial than today. Thus, adopting technological innovations ensures that companies can keep up.
  • Integration — Sometimes, goods must travel through the air, on the water, and via roads to reach their destination. Freight forwarding systems let businesses coordinate all travel types in one user-friendly application. 
  • Shipping route optimization — 3PL freight software helps manufacturers find the shipping container traveling the shortest distance between the factory and its destination. On the forwarder’s side, automatic route allocation saves time and money for unparalleled efficiency.

Enhanced Visibility and Shipment Tracking

Quality 3PL forwarding software provides real-time shipment information, including the exact location of goods, at any time. Whether working remotely or in the office, the platform offers a one-stop shop for all visibility and inventory tracking needs. It increases customer satisfaction by preventing delays before they occur and notifying companies about their packages.

Businesses are only going to demand increasingly accurate tracking and order visibility. But by implementing the technology now, freight forwarders can stay ahead of the curve.

Real-Time Data Insights for Informed Decision-Making

Regardless of the industry, data is integral for good decisions. While everyone “gets lucky” sometimes, successful companies are built upon a strong foundation of accurate, holistic data. And that is precisely what 3PL freight software supplies.

Upon system integration, freight forwarding platforms aggregate all necessary information, compiling advanced analytics reports to ensure owners and managers are fully informed about every aspect of the business. With easily accessible, accurate data, decisions boost profits and add actual value to the enterprise. 

Freight Forwarding Statistics

The worldwide freight forwarding market is expected to exhibit a Compound Annual Growth Rate (CAGR) of 4% between now (2023) and 2032 as businesses continue extending their international reach. Industrialization and rapid growth among sectors commonly using freight forwarders present compelling expansion opportunities, but only if companies can hop aboard the 3PL freight software longevity train. 

As the industry explodes, the only way to remain atop the chaos is by implementing a scalable, technological solution that can effortlessly cope with boosted capacities, evolving needs, and broadening horizons.

Key Global Freight Movement Statistics

With numbers at the forefront, moving to digital, automated processes is a wise decision for freight forwarders. Just a quick look at the current major global statistics proves the figures speak for themselves:

  • The digital freight forward market started at $2.92 billion in 2020 and is set to reach $22.9 billion in 2030, accounting for 8% of the overall market. 
  • In a McKinsey survey, 90% of supply chain leaders reported buying digital supply chain management technology since 2021. 
  • The same study stated that 80% expected to continue investing in digital solutions to future-proof their companies.

But what’s triggered these staggering statistics? Experts say it’s the following industry trends:

  • The global expansion of e-commerce
  • Boosted competition in the space 
  • Increased demand for visibility and granular tracking
  • The hike in Free Trade Agreements (FTA) and global trade deals
  • Higher logistics costs encourage a digital transformation.
  • AI- and ML-backed process automation
  • Cloud-based all-in-one solutions (like 3PL freight software)

Selecting the Ideal 3PL Freight Software

Since the entire industry’s digitalization, plenty of 3PL freight software has appeared on the market, giving forwarders tons to choose from. But so many choices can be overwhelming, making it nearly impossible for companies to select the perfect one for them without a helping hand. 

To purchase the best platform, business owners must understand their requirements. A solution only works as intended if it genuinely resolves current pain points and prevents future ones.

Once the needs are established, companies can move on to the following ten considerations:

10 Factors to Consider

#1 Advanced Technology

As mentioned earlier, advanced technology is a must-have when picking software. The freight forwarding tech world moves quickly, so buying outdated products will limit opportunities and decrease the likelihood of remaining profitable.

This is the most critical factor, drastically altering the platform’s performance. Plus, it saves precious dollars in the long run and prevents automation errors.

#2 Scalability

Businesses change and expand constantly, but due to the typically slow(ish) order increase, some companies only realize they’ve grown considerably once they’re struggling to meet clients’ demands. Things that seemed easy before feel arduous and time-consuming. As such, any 3PL freight software must boast excellent scalability. Throwing money at a platform that won’t be able to keep up with capacity two years from now isn’t the most intelligent entrepreneurial decision.

#3 Packaging and Labeling Standards

Adhering to specific regulations around product packaging and labeling is crucial in the freight forwarding sphere. The ideal 3PL software will offer invaluable compliance measures, expertly averting possible complications. It eliminates the complications of aligning with the always-evolving industry regulations.

#4 Integration with Current Systems

Some 3PL freight software integrates with existing systems better than others — several are even unable to work with services provided by other brands. However, seamless system integration guarantees data synchronization, eliminating the need for manual data entry and the necessity for heavily customized utilities. Thus, considering whether the particular model can work synergistically with in-place systems is necessary before splashing cash.

#5 Ease of Use

Well-designed user interfaces and responsive navigation raise the likelihood of successful adoption and the platform’s efficiency within the organization.

However, ease of use extends beyond design and ongoing support and training. Thankfully, 3PL freight software developers understand the need for vendor training to help their customers effectively use the platform, ensuring most providers are of this service.

#6 Reporting and Billing

Managing billings and receivables efficiently is one of the most essential parts of running a business, especially in the logistics industry. As such, it’s also one of the most integral elements of 3PL freight software. Opt for a solution that automates storage, put-away, receiving, and shipping tasks. Instantaneous processes guarantee accurate, timely invoicing for said services. 

#7 Vendor Reputation

Nothing beats research when it comes to finding the perfect freight forwarding software. Unhappy (or incredibly happy) customers are always willing to share their opinions online. So, always research platform providers before buying into their offerings. A vendor with a strong reputation and a history of optimal implementations will provide high-quality software with desirable customer service.

#8 Cost

Contrary to widespread belief, “cost” is more than the original price. Just because something is expensive doesn’t mean it’s good. Just because something is cheap doesn’t mean it’s awful. And vice versa. 

So, companies should move beyond considering the raw price to evaluating the value of each offer, alongside remaining vigilant about any hidden costs or extra fees that could occur during customization or implementation.

In other words, freight forwarders must establish the overall ROI to guarantee that the solution provides the long-term value they’re hoping for.

#9 Support for Multiple Accounts

Generally speaking, more than one person or entity needs to access information held on the 3PL freight software. Depending on the company’s size, each department requires real-time access to store data. Great platforms offer multiple user accounts to ensure numerous people can log in simultaneously, improving employee collaboration and efficiency.

#10 Customer Service

Everybody, freight forwarders included, forgets the value of quality customer service until they need it. And that’s only natural. However, considering the efficacy of the provided support before buying the software is essential. Why? Because by the time it’s required, it’s far too late.

There should be enough support options available to help at all times, including live chat, FAQs, video tutorials, phone numbers, and email addresses for key personnel.

Implementation and Integration

While definitive implementation and integration steps depend on the specific 3PL freight software purchased, a few tried-and-tested universal strategies for ensuring success and seamlessness are outlined below.

4 Steps for Seamless Implementation

  1. Set baselines and objectives — Successful deployment rests on a solid foundation. Companies should outline how they want their processes to look after implementation and work backward. That way, they’ll be able to pick the best 3PL freight software without wondering whether it’ll fit their needs down the line.
  2. Embrace the change process — Humans are hard-wired to resent change. But as the adage says, it’s the only constant. Managers should help employees embrace the transition process to ensure smooth implementation.
  3. Communicate effectively — Similarly, rolling out freight forwarding software shouldn’t involve only a few employees. Everybody needs to be involved to increase the likelihood of happy adoption.
  4. Invest in training — Regardless of how user-friendly a solution is, companies must provide employees with adequate training to be influential users.

Best Practices for Successful Integration

Implementation should be conducted alongside integration, which comes with a few best practices, such as:

  • Ensuring all technology is supported by current systems.
  • Selecting a great internal project manager to guarantee the steps mentioned above (and those listed here) are conducted.
  • Communicating the value of the new platform to shareholders.
  • Listening to employee feedback to establish improvement areas.

Security and Compliance Considerations

Data security and regulatory compliance are vital areas of consideration in logistics. From the labels on the shipments to how customer data is stored, policymakers go through the industry with a fine-toothed comb, ensuring domestic shipping companies are doing their best.

Thankfully, modern technology has given trucking and freight forwarders a relatively easy way to ensure they stay within the rules.

Ensuring Data Security in Freight Operations

Today’s 3PL freight software takes data security very seriously, providing many features that protect users’ information, such as:

  • A centralized, cloud-based data storage. 
  • Strict document access protocols.
  • End-to-end encryption.
  • API integration for secure, seamless data transfers.
  • Secure access to protect against breaches.
  • Always-updated security policies.

Guaranteeing Compliance with Industry Regulations

Compliance ensures that all shipments meet regulatory and legal requirements set by industry organizations, national governments, and international entities. The freight shipping world is a complex, multi-faceted part of the industry, encompassing a vast range of standards that must be met to guarantee the safe and secure transportation of goods.

The three main concerns are Customs documents, packaging, and labeling, but 3PL freight forwarding software automates it all, keeping companies safe from costly penalties for failing to comply.

The future is largely unknown, but the emerging technologies and predicted industry developments give freight forwarders a rare look into the sector’s anticipated tomorrow.

Predicted Sector Developments

As time progresses, experts suggest well-curated data will define the difference between companies making it in the industry and those not, citing a survey in which 48% of respondents noted that data will improve visibility into assets over the coming three years.

The same survey mentions that 44% believe data will improve customer relationship management, and 35% consider it to enhance workforce optimization.

Moreover, 87% of freight forwarders have noticed that more shippers emphasize technology solutions during their evaluation processes. Unsurprisingly, so many forwarders are already turning toward advanced 3PL freight software. 

Integration with Emerging Technologies

With technology at the forefront, it’s worth noting the emerging technologies that the best freight forwarding software will integrate/have integrated:

  • IoT devices
  • Automation backed by machine learning and artificial intelligence
  • Tailored solutions
  • Drones and other autonomous vehicles
  • Blockchain technology

Most emerging technologies can be seen in other professional and personal environments. So, companies should expect the advancements to come thick and fast as the calendar flips to 2024.

3PL Freight Software Success Stories

Cloud-based 3PL freight software has a track record of delivering exceptional results for forwarders and other businesses. Google, Amazon, and Walmart have implemented the solutions and found global success. However, even smaller companies have benefitted, with many saying they’ve reduced associated costs, boosted efficiencies, and were able to pick up the new working method in just ten to 20 hours.

The Bottom Line

Freight forwarding software brings enhanced visibility and tracking, real-time data for informed decision-making, and improved efficiency to companies that adopt the technology. So, why wait? Providers have much to gain and little to lose by going digital with an advanced 3PL freight platform.

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3G

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January 29, 2024

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3PLs

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Taking Your 3PL Beyond TMS Basics

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Every 3PL has similar objectives: Win more of their customers’ freight; become an increasingly important business partner to each customer; and be able to handle as many customers as they’re able to win. What’s one common element to achieving all three? The TMS, and its ability to move a 3PL (and its freight) beyond the basics.  

What does “beyond TMS basics” mean? 

Most TMS products stay within “basic” territory for one of two reasons: they handle multiple operations, but only at the most surface level, or they are very narrowly focused on one specific kind aspect of transportation. Going beyond the basics means plugging gaps – either advancing operations beyond what a surface level TMS can handle or consolidating all operations in one place. Only moving beyond the basics, with a single TMS, will enable a 3PL to meet its core objectives. 

Winning more freight 

What’s one of the biggest impediments to winning all of your current customers’ freight? How about breadth and depth of managed services supported by your TMS. After all, it’s difficult to win that which your system isn’t set up to manage. Many customers’ needs span multiple over the road modes, and while many TMS offerings cover LTL and even TL, few feature parcel or drayage, and almost none include all four – which may well be necessary to winning all of their shipments. Shipper loads will also vary in their complexity, and certain loads will not be manageable without advanced planning and optimization algorithms. 

Becoming a key partner 

The more integral a partner you become, the less you have to worry about competitors swooping in and winning away your customers. Many customers today look to 3PL partners not only to provide transportation services, but technology access, too. Offering a sufficient number of services is absolutely key to winning every load today, but being that technology partner requires consolidation around a single TMS for two reasons. First is the ability to integrate, and share data, with customers’ systems. Second, it is essential to provide customer access via portals, as many want to be able to self-manage certain aspects of transportation. These advanced TMS features help cement your position as an indispensable partner well into the future. 

Never turning away business 

Nobody ever wants to turn away business because they lack the capacity to service additional accounts, but each team member can only handle so much. However, the amount each person is able to manage is highly dependent on the tools they are using and their ability to automate multiple workflows. The more basic the technology, the less “scalable” each person is. Learning multiple systems, constantly switching back and forth between them, and frequent manual intervention take time. Adding additional headcount, too, is often neither feasible nor sustainable. The only answer is enhancing the human-technology partnership through the greatest possible degree of automation. 

So, what’s next? 

Are you nodding along, saying: “Yup, that’s exactly what we’re trying to do,” while realizing that maybe it’s your TMS holding you back? Connect with us, and one of our TMS experts will demonstrate the three modules only found together in 3G’s TMS.  

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Author

3G

Publish date

November 15, 2023

Categories

3PLs

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